EX-10.1








    Exhibit 10.1



 




    FIRST
    AMENDMENT

    TO

    EMPLOYMENT AGREEMENT



 



    This amendment (the “First Amendment”) is made the
    12th day
    of August, 2008, between AXS-One Inc., a Delaware corporation
    (the “Company”) and William Lyons (the
    “Executive”).



 



    WHEREAS, the Company previously entered into an Employment
    Agreement with the Executive dated as of April 21, 2004,
    (the “Agreement”); and



 



    WHEREAS, in light of changes to the law concerning severance and
    deferred compensation, including Internal Revenue Code
    Section 409A and related Treasury Regulations, the Company
    and the Executive wish to amend the Agreement by this First
    Amendment to clarify certain provisions in the event the
    Executive’s employment is terminated, and to make other
    minor, clarifying revisions to the Agreement,



 



    NOW THEREFORE, the following Sections of the Agreement are
    hereby amended as follows:



 



    1.  Section 4.b of the Agreement is amended by
    the addition of the following at the end thereof.



 



    “Notwithstanding the foregoing, any bonus payable hereunder
    shall be paid by no later than the
    15th day
    of the third month following the end of the calendar year in
    which the right to the bonus is no longer subject to a
    substantial risk of forfeiture (as defined for purposes of Code
    Section 409A, including Treasury Regulations
    Section 1.409A-1(d)).”



 



    2.  Paragraph (ii) of Section 7.b of the
    Agreement is deleted and the following substituted therefor:



 



    (ii) If the Executive’s employment is terminated
    without Good Cause under circumstances constituting an
    Involuntary Separation from Service within the meaning of
    Treasury Regulations
    Section 1.409A-1(n)
    other than upon a Change in Control or within 12 months
    following a Change in Control, the Company shall pay the
    Executive a separation pay benefit (the “Severance
    Payments”) equal to twelve (12) months of the
    Executive’s annual rate of base salary (as of the
    Executive’s Separation from Service date) and will make
    available a subsidized healthcare benefit, as described below.



 



    (1) Payment of the Severance Payments shall commence as of
    the Executive’s Separation from Service date, and shall
    continue thereafter in equal fixed installments over a twelve
    month period in accordance with the Company’s standard
    payroll procedures and normal payroll dates then in effect.
    Notwithstanding the foregoing, no Severance Payments shall be
    paid during the 30 days immediately following the
    Executive’s Separation from Service date; any Severance
    Payments that would have otherwise been paid during such
    30 day period shall be withheld and paid on the
    31st day
    following the Executive’s Separation from Service, without
    adjustment for the delay in payment.



 



    (2) In the event the value of the Severance Payments shall
    exceed two times the lesser of the Executive’s annualized
    compensation or the maximum amount that may be taken into
    account for qualified plan purposes (in each case, as determined
    in accordance with Treasury Regulation Section
    1.409A-1(b)(9)(iii)(A)), the excess shall not be paid as
    provided in (1), above, but instead shall be withheld and paid
    on the first regularly scheduled payroll date immediately
    following the date that is six months after the Executive’s
    Separation from Service date, without adjustment for the delay
    in payment.



 



    (3) In no event shall Severance Payments be accelerated,
    nor shall the Executive be eligible to defer payment of
    Severance Payments to a later date.













 






    (4) If COBRA continuation coverage under any Company
    healthcare plan is elected, the Company shall provide such
    coverage at no cost to the Executive for the period of the COBRA
    coverage or twelve months, whichever is shorter.”



 



    3.  Section 7.c of the Agreement is deleted and
    the following substituted therefor:



 



    “c. Termination by Executive. Executive may terminate
    this Agreement at any time upon 30 days prior written
    notice to the Company. Except as otherwise provided in this
    section 7.c. or in section 7.e. below, if Executive
    terminates his employment under this Agreement, Executive shall
    only be entitled to receive the Accrued Amounts, and in no event
    shall Executive be entitled to Severance Payments or any other
    severance benefit. Notwithstanding the foregoing, in the event
    that the Executive has a Termination for Good Reason under
    circumstances constituting an Involuntary Separation from
    Service within the meaning of Treasury Regulations
    Section 1.409A-1(n)
    and such Separation from Service is not upon a Change of Control
    or within 12 months following a Change of Control, the
    Executive shall be entitled to the Severance Payments and other
    benefits described in Section 7.b., as if he had been
    terminated by the Company without Good Cause. Termination for
    Good Reason means a resignation of employment and Separation
    from Service (as defined for purposes of Code Section 409A)
    within 180 days following the initial existence of one or
    more of the following conditions arising without the
    Executive’s consent:



 



    (i) any material reduction in the Executive’s base
    salary or a failure of the Company to pay any earned bonus when
    due;



 



    (ii) any relocation of the Executive’s primary place
    of employment more than 40 miles from the Company’s
    current executive offices located at 301 Route 17 North,
    Rutherford, New Jersey 07070;



 



    (iii) any material reduction in the Executive’s
    responsibilities or a direction from the Company that the
    Executive report to a person of lower rank or responsibilities
    than the person(s) to whom the Executive reports as specified in
    this Agreement; or



 



    (iv) any other material breach by the Company of this
    Agreement or any other agreement between the Company and the
    Executive;



 



    provided, in any such case, that (1) a prior written notice
    specifying the reasons within ninety (90) after the initial
    existence of the condition and an opportunity to cure such
    condition (if curable) shall be afforded the Company, and
    (2) “Good Reason” shall exist only if the Company
    shall fail to cure such condition within 31 days after its
    receipt of such prior written notice. In addition, until the
    actual Separation from Service the Executive must remain willing
    and able to continue to perform services in accordance with the
    terms of this Agreement and the Executive must not be in breach
    of any of the Executive’s obligations hereunder.”



 



    4.  The first paragraph of Section 7.e of the
    Agreement is deleted and the following substituted therefor:



 



    “e. Change of Control and Termination in Connection
    with Change of Control. Upon the occurrence of a Change of
    Control of the Company, all Options to purchase Common Stock
    then granted to Executive which are unvested at the time of the
    Change of Control will be immediately vested and Executive shall
    have a period of 12 months to exercise such Options. In
    addition:



 



    (1) Voluntary Termination. The Executive shall have
    the right to voluntarily terminate employment during the
    30 day period following a Change of Control (unless the
    Company or its successor requests that Executive continue to
    provide services hereunder for a period not in excess of
    90 days, in which case Executive may exercise his right of
    termination hereunder only during a 30 day period following
    such post-Change of Control service period), in which event,
    provided the termination constitutes a Separation from Service
    as defined for purposes of Code Section 409A, the Executive
    shall be entitled to a deferred compensation benefit




    

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    (“Deferred Compensation”) equal to twelve months of
    the Executive’s annual rate of base salary (as of the
    Executive’s Separation from Service date) and a subsidized
    healthcare benefit, as described below.



 



    (a) Payment of the Deferred Compensation shall commence as
    of the Executive’s Separation from Service date, and shall
    continue thereafter in equal fixed installments over a twelve
    month period in accordance with the Company’s standard
    payroll procedures and normal payroll dates then in effect.
    Notwithstanding the foregoing, if at the time of the
    Executive’s Separation from Service, the Company (or any
    related employer treated with the Company as the service
    recipient for purposes of Code Section 409A) is publicly
    traded on an established securities market (as defined for
    purposes of Code Section 409A) and the Executive is a
    “Specified Employee” (as defined for purposes of Code
    Section 409A), no Deferred Compensation shall be paid to
    the Executive prior to the date that is six (6) months
    after the Separation from Service (or, if earlier, the
    Executive’s date of death) (the “Distribution
    Restriction Period”). Any amount that would otherwise have
    been paid during the Distribution Restriction Period shall be
    paid on the first regularly scheduled payroll date immediately
    following the end of the Distribution Restriction Period,
    without adjustment for the delay in payment.



 



    (b) In no event shall the Deferred Compensation payments be
    accelerated, nor shall the Executive be eligible to defer
    payment of Deferred Compensation to a later date.



 



    (c) If COBRA continuation coverage under any Company
    healthcare plan is elected, the Company shall provide such
    coverage at no cost to the Executive for the period of the COBRA
    coverage or twelve months, whichever is shorter.



 



    (2) Involuntary Termination. In the event of a
    termination of Executive’s employment hereunder by the
    Company without Cause or by the Executive for Good Reason (as
    defined above) and, in either case, under circumstances
    constituting an Involuntary Separation from Service on or within
    12 months following a Change of Control, the Company will
    pay Executive the Accrued Amounts plus a Change of Control
    Severance Benefit equal to 2.5 multiplied by the
    Executive’s annual rate of base salary (as of the
    Executive’s Separation from Service date). The Change in
    Control Severance Benefit shall be paid on the 30th day
    following the Executive’s Separation from Service date, in
    a lump sum. In addition, if COBRA continuation coverage under
    any Company healthcare plan is elected, the Company shall
    provide such coverage at no cost to the Executive for the period
    of the COBRA coverage or twelve months, whichever is
    shorter.”



 



    5.  Section 8 of the Agreement is amended by
    deleting the last sentence thereof and substituting the
    following therefor



 



    “Such amounts are inclusive, and in lieu of, any amounts
    payable under any other salary continuation or severance
    arrangement of the Company.”



 



    6.  New Section 9.q is added to the Agreement, to
    read as follows:



 



    “q. Code Section 409A Compliance.



 



    (i) The parties hereto recognize that certain provisions of
    this Agreement may be affected by Section 409A of the
    Internal Revenue Code and guidance issued thereunder, and agree
    to amend this Agreement, or take such other action as may be
    necessary or advisable, to comply with Section 409A. The
    parties hereto intend that the Agreement, as amended, be
    consistent with IRS Notice
    2007-78, IRS
    Notice
    2007-86 and
    other Code Section 409A transition relief, and it shall be
    interpreted accordingly.



 



    (ii) Notwithstanding anything herein to the contrary, it is
    expressly understood that at any time the Company (or any
    related employer treated with the Company as the service
    recipient for purposes of Code Section 409A) is publicly
    traded on an established securities




    

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    market (as defined for purposes of Code Section 409A), if a
    payment or provision of an amount or benefit constituting a
    deferral of compensation is to be made pursuant to the terms of
    this Agreement to the Executive on account of a Separation from
    Service at a time when the Executive is a Specified Employee (as
    defined for purposes of Code Section 409A(a)(2)(B)(i)), such
    deferred compensation shall not be paid to the Executive prior
    to the date that is six (6) months after the Separation
    from Service or as otherwise permitted under Treasury
    Regulations Section 1.409A-3(i)(2).



 



    (iii) For purposes of this Agreement, the following
    definitions shall apply:



 



    (1) Separation from Service means, generally, a termination
    of employment with the Company, and shall have the same meaning
    as such term has for purposes of Internal Revenue Code
    Section 409A (including Treasury
    Regulation Section 1.409A-1(h)).



 



    (2) Involuntary Separation from Service means a Separation
    from Service due to the independent exercise of the unilateral
    authority of the Company to terminate the Executive’s
    employment, other than due to the Executive’s implicit or
    explicit request, where the Executive was willing and able to
    continue to employment with the Company. Notwithstanding the
    foregoing, a termination for Good Reason may constitute an
    Involuntary Separation from Service. Involuntary Separation from
    Service shall have the same meaning as such term has for
    purposes of Internal Revenue Code Section 409A (including
    Treasury
    Regulation Section 1.409A-1(n)).”



 



    7.  Exhibit C of the Agreement is amended by
    deleting the last sentence of the first paragraph thereof and
    substituting the following therefor:



 



    “In the event that Company Payments must be reduced, Change
    in Control Severance Payments, or, if none, Deferred
    Compensation payable in accordance with Section 7.e shall
    be reduced to the extent necessary.”



 



    All of the other terms and conditions of the Employment
    Agreement shall remain in full force and effect.



 



    AXS-ONE INC.



 


			
	 	    By 
	
    /s/  Joseph
    P. Dwyer









    Joseph P. Dwyer




    Chief Executive Officer



 


			
	 	     
	
    /s/  William
    P. Lyons









    William P. Lyons




    

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